U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-KSB

                  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                   For the fiscal year ended December 31, 2003

                         Commission File Number: 0-6088

                              Earth Sciences, Inc.
                              --------------------
                 (Name of small business issuer in its charter)

              Colorado                             84-0503749
              --------                             ----------
      (State of incorporation)          (IRS Employer Identification No.)

           8100 SouthPark Way, Unit B, Littleton, Colorado 80120-4525
           ----------------------------------------------------------
          (Address of principal executive offices, including Zip Code)

      (Registrant's telephone number, including area code): (303) 734-1727

         Securities registered under Section 12(g) of the Exchange Act:
                        Common Stock, one cent par value
                        --------------------------------
                                (Title of class)

Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. [X] Yes [ ] No

Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B contained in this form, and no disclosure will be contained, to
the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB. [ X ]

State issuer's revenues for its most recent fiscal year.  $68,000

State the aggregate market value of the voting and non-voting common equity held
by nonaffiliates computed by reference to the price at which the common equity
was sold, or the average bid and asked prices of such common equity, as of a
specified date within the past 60 days. As of March 19, 2004 was $790,626.


Number of shares outstanding of registrant's Common Stock, one-cent par value as
of March 19, 2004 - 33,445,254.


DOCUMENTS INCORPORATED BY REFERENCE:
None


Transitional Small Business Disclosure Format:  Yes __ No  X

<PAGE>

PART I

Item 1. Description of Business

This Annual Report may contain forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933. In particular, such forward-looking
statements may be found in this section under "Description of Business," and
below in Item 6. under "Management's Discussion and Analysis or Plan of
Operation." Actual events or results could differ materially from those
discussed in the forward-looking statements as a result of various factors
including those set forth below or under the heading "Management's Discussion
and Analysis or Plan of Operation."

(a) Business Development.
Earth Sciences, Inc. ("ESI" or "Registrant", which term includes its
wholly-owned subsidiaries unless otherwise indicated) is a diversified mineral
exploration and development company. ESI was incorporated under the name of
Colorado Central Mines, Inc. in Colorado in 1957. The major activities of the
Company include the ownership of a currently idled chemical facility in Calgary,
Alberta; and the maintenance of several mineral resources and prospects in the
Western US. In May 1997, ESI acquired a 51% equity position in ADA Environmental
Solutions, LLC ("ADA-ES) through a combination of stock and cash. The
acquisition agreement provided for payments of cash and notes and included an
option for ESI to acquire the remaining equity interests. In May 1998, Earth
Sciences exercised that option, acquiring a 100% interest in ADA-ES by issuance
of 1,716,000 shares of stock to the shareholders of ADA-ES in exchange for all
their shares in ADA-ES. In March 2003 ADA-ES and ESI entered into an agreement
for the pro rata distribution of all the common stock of ADA-ES to the
shareholders of ESI. The distribution occurred on September 12, 2003 based on a
record date of August 29, 2003 as set by the ESI Board of Directors. The
distribution resulted in ADA-ES being a separate company operated apart from
ESI.

During 2003, ESI, through Earth Sciences Extraction Company ("ESEC"), studied
and pursued the use with others of the idle facility in Calgary for a variety of
potential activities, and maintained its position in several mineral resources
and prospects in the Western US.

ESEC is a wholly owned Canadian limited partnership of ESI. ESEC owns a solvent
extraction facility in Calgary, Alberta that remained idle during 2003, except
for some limited sublease activity. ESEC has entered one sublease agreement for
a portion of the facility, executed a letter of intent for use of a portion of
the site and is in discussions with other parties on further sublease
arrangements. ESEC has initiated steps to sell major pieces of equipment that
would not have general use in the planned subleasing activity. The net proceeds
from such planned sales will be used to fund overall operations and expanded
activities at the facility. There can be no assurances that Registrant will be
able to successfully arrange sublease agreements on the majority of the facility
and site.

ESI did not plan nor did it conduct any significant mineral exploration or
development activities in 2003. ESI is developing plans for limited mineral
exploration or development activities in 2004 dependent upon the availability of
funds, and also intends to maintain the mineral interests in alunite, phosphate,
and vanadium it currently holds.

(b) Business of Issuer.
Registrant is diversified mineral exploration and development company.
Registrant owns a currently idled processing facility in Calgary, Alberta,
Canada; alunite properties which contain alumina, sulfur and potash; and other
mineral properties and prospects. The Company intends to focus its resources in
furthering its mineral exploration activities and alternative uses for the
currently idle Calgary plant.

CALGARY FACILITY
ESEC's facility in Calgary, Alberta, recovered uranium from phosphoric acid
during the period from 1983 through 1987. Uranium oxide production was suspended
in the fall of 1987 when the adjacent fertilizer plant from which the facility
received its feedstock suspended operations. The contract under which the
uranium was sold was modified in 1990 to allow unrestricted alternative use of
the facility. Revamp of the facility to allow production of purified phosphate
products was completed in 1997. The Calgary facility routinely produced
technical grade phosphoric acid through August 1999 when operations were
suspended for lack of sufficient working capital. Efforts to re-start the
facility for such operations were frustrated by a general economic slowdown.
Management is seeking sublease arrangements for other activities at the plant
and is in the process of selling equipment that does not have general use.
Proceeds from those sales will be used to fund overall operations and expanded
activities at the plant in Calgary. There can be no assurances that subleases
can be arranged for the Calgary facility.

                                       1
<PAGE>

Mineral Exploration Activities
During 2003 Registrant did not plan nor did it conduct any significant
exploration or development activities, but maintained its ownership position in
the several mineral interests it holds. The mineral interests maintained by
Registrant include significant resource interests in alumina, gold, vanadium,
potash and sulfur, and prospects for copper/molybdenum and silver (see Item 2
below). Limited exploration or development activities are planned in 2004
dependent upon the availability of funds.

The Spin-Off
In March 2003, ESI and ADA-ES entered into an agreement to provide for the
distribution of the ADA-ES stock to the shareholders of ESI. In an effort to
maximize stockholder value, the ESI Board of Directors decided to separate its
significant operations into two separate businesses. Since ESI no longer
produces the chemicals needed for the ADA-ES proprietary environmental products,
there is no longer a necessary business connection between the two companies.
The separation allows ESI to focus on its mineral exploration business, while
ADA-ES focuses on its environmental technology/specialty chemical business. The
distribution has resulted in two independent public companies.

The separation of the two businesses was accomplished through a spin-off of
ADA-ES, Inc. In the spin-off, 100% of the outstanding shares of ADA-ES common
stock held by ESI were distributed to the ESI shareholders on September 12,
2003. In the distribution, the ESI shareholders received one share of ADA-ES
common stock for every ten shares of ESI common stock they held on the close of
business on August 29,2003, the record date for the spin-off. As required under
the Distribution Agreement with ADA-ES, in September 2003 ADA-ES transferred
$100,000 in cash to the Company and assumed notes payable to Tectonic
Construction Co. totaling $1,150,000. ADA-ES also assumed other indebtedness
from ESI in the amount of $130,000 related to deferred compensation for past ESI
employees.

RISK FACTORS
Ownership of the common stock of ESI is speculative and involves a high degree
of risk. Any prospective investors should read the information incorporated
herein by reference, and carefully consider, among others, the following risk
factors in addition to the other information set forth elsewhere in this Annual
Report.

Specifics Risks Related to the Company
--------------------------------------
No Dividends. The Company has paid no cash dividends on its Common Stock and has
no present intention of paying cash dividends in the foreseeable future. It is
the present policy of the Board of Directors to retain all earnings to provide
for the growth of the Company. Payments of cash dividends in the future will
depend, among other things, upon the Company's future earnings, requirements for
capital improvements, the operating and financial conditions of the Company and
other factors deemed relevant by the Board of Directors.

Going Concern, Lack of Positive Cash Flow and Lack of Profitability. During
2003, the Company spun-off ADA-ES and as a result, is suffering a loss from its
ongoing operations. In addition, it is involved in significant litigation (see
Item 3. Legal Proceedings) and does not have, nor is expected to have in the
near future, a positive cash flow. Apart from ADA-ES, the Company's operating
history has resulted in losses from operations for at least the last five years.
While certain of the Company's operations may be profitable during a given
fiscal year, the Company's operations as a whole may be unprofitable due to
exploration and development costs on properties from which no revenue is
derived, and to continuing corporate general and administrative costs. The
Company's continued operations are dependent upon additional advances or loans,
sale of assets, resolution of its litigation and ultimately achieving positive
cash flow from operations. The financial statements, included in response to
Item 7 below do not include adjustments, which may result in the Company's
ability to continue operations as a going concern.

Dilutive Effect of Issuance of Additional Shares on Current Shareholders. The
Board of Directors has the authority to authorize the offer and sale of
additional securities without the vote of or notice to existing shareholders,
and it is likely that additional securities will be issued to provide future
financing or in connection with funding future operations. The issuance of
additional securities could dilute the percentage interests and per share book
value of existing shareholders.

Volatility of Price for Common Stock. The market price for shares of the
Company's Common Stock may be highly volatile depending on news announcements or
changes in general market conditions. In recent years the stock market has
experienced extreme price and volume fluctuations.

                                       2
<PAGE>

Risks Related to the Exploration and Development of Minerals Nature of Mineral
Exploration and Development; No Proven Commercially Viable Reserves Yet
Discovered on the Company's Mineral Properties. Exploration for minerals is
highly speculative and may involve greater risks than many other businesses.
Many exploration programs, including those which have been conducted by the
Company, do not result and have not resulted in the discovery of mineralization
and any mineralization discovered may not be of sufficient quantity or quality
to be profitably mined. The Company's mineral exploration and development
activities are subject to all of the operating hazards and risks normally
incident to such activities, such as encountering unusual or unexpected
formations, environmental pollution, personal injury and flooding. All of these
factors may result in losses in relation to the amounts spent which are not
recoverable. With the exception of the San Luis gold mine (where mining
operations were terminated in 1996), no commercially viable reserves have yet
been discovered on the Company's mineral properties.

Competition and Scarcity of Mineral Lands. Many companies and individuals are
engaged in mineral exploration and development, including large, established
mining companies with substantial capabilities and long earnings records. There
is a limited amount of desirable mineral lands available for claim staking,
lease or other acquisition in the United States ("US"), Venezuela and other
areas where the Company contemplates conducting exploration activities. The
Company may be at a competitive disadvantage in acquiring mineral properties
since it must compete with these individuals and companies, many of which have
greater financial resources and larger technical staffs than the Company. From
time to time, specific properties or areas which would otherwise be attractive
to the Company for exploration or acquisition are unavailable due to their
previous acquisition by other companies.

Fluctuation in the Price of Minerals. The market price of minerals is extremely
volatile and beyond the control of the Company. Gold prices are generally
influenced by basic supply/demand fundamentals. The market dynamics of
supply/demand can be heavily influenced by economic policy, i.e., central banks
sales/purchases, political unrest, conflicts between nations, and general
perceptions about inflation. Fluctuating metal prices may have a significant
impact on the Company's results of operations and operating cash flow.
Furthermore, if the price of a mineral should drop dramatically, the value of
the Company's properties which are being explored or developed for that mineral
could also drop dramatically, and the Company might not be able to recover its
investment in those properties. The decision to put a mine into production, and
the commitment of the funds necessary for that purpose, must be made long before
the first revenues from production will be received. Price fluctuations between
the time that such a decision is made and the commencement of production can
change completely the economics of the mine. Although it is possible to protect
against price fluctuations by hedging in certain circumstances, the volatility
of mineral prices represents a substantial risk in the mining industry generally
which no amount of planning or technical expertise can eliminate. The Company is
not involved in, nor does it expect to enter into any hedging activities

Environmental Controls. Compliance with environmental quality requirements and
reclamation laws imposed by federal, state, provincial, and local governmental
authorities may necessitate significant capital outlays, may materially affect
the economics of a given property, or may cause material changes or delays in
the Company's intended activities. The Secretary of the Interior has directed
the BLM to propose amendments to surface management regulations that impose more
stringent reclamation and environmental protection requirements on mining
operations. The extent of the changes, if any, which may be made by the BLM is
not presently known, and the potential impact on the Company as a result of
future regulatory action is difficult to predict. New or different environmental
standards imposed by any governmental authority in the future may adversely
affect the Company's activities.

Uncertainty of Funding for Exploration. The Company has funded much of its past
exploration and acquisition activities through joint venture arrangements, which
minimize the cost of such activities to the Company and allow it to explore and
acquire a greater number of properties than it would otherwise be able to
explore or acquire on its own. The Company has also funded a portion of its
exploration activities without joint venture participation, resulting in
increased costs to the Company. Additional funding from sought after partners or
third parties, however, may be necessary to conduct detailed and thorough
evaluations of, and to develop certain properties. The Company's ability to
obtain this financing will depend upon, among other things, the price of the
underlying mineral or metal and the industry's perception of its future price.
Therefore, availability of funding is dependent largely upon factors outside of
the Company's control, and cannot be accurately predicted. The Company does not
know from what sources it will derive any required funding. If the Company is
not able to raise additional funds (as to which there can be no assurance), it
will not be able to fund certain exploration activities on its own.

                                       3
<PAGE>

Uncertainty of Development and Operating Property Economics and Ore Grades at
Development Properties. Decisions as to whether any of the mineral development
properties which the Company now holds or which it may acquire in the future
contain commercially minable deposits, and whether such properties should
therefore be sold or brought into production, depend upon the results of
exploration programs and/or feasibility analyses and the recommendations of duly
qualified engineers or geologists. Such decisions involve consideration and
evaluation of several significant factors, including, but not limited to, the
(a) costs of bringing a property into production, including exploration and
development work, preparation of production feasibility studies and construction
of production facilities, (b) availability and costs of financing, (c) ongoing
costs of production, (d) market prices for the mineral to be produced, and (e)
the amount and grades of reserves or mineralized material. There can be no
assurance that any of the development properties now held by the Company, or
which may be acquired by the Company, contains a commercially minable mineral
deposit, and therefore no assurance that the Company will ever generate a
positive cash flow from the sale of or production operations on such properties.
In addition, once a property is sold with a retained royalty or placed into
production, risks still exist that the amount and grade of its reserves will not
actually be as predicted. To the extent that lower amounts and/or grades of
reserves are experienced, costs per unit produced and profitability can be
adversely affected. Depending upon the extent of such an effect in any of the
Company's properties, the Company could incur a writedown on its investment in
any such property.

Limited Operating Funds and Staff. The Company currently has no continuing
significant source of revenues to fund expanded activities. The Company must
depend on income from subleasing activities at ESEC, possible proceeds from the
sale of idle equipment there and/or funding from third parties to fund expanded
activities, and there can be no assurances that such income, proceeds or funding
will be forthcoming. In addition, the Company currently has no paid staff with
which to conduct exploration activities, but must depend on its limited working
capital, sharing arrangements with others, and/or the use of its common stock to
compensate personnel involved in future activities. There can be no assurances
that the Company will be able to arrange satisfactory agreements to compensate
others for any planned activities.

Risks Related to the Idled Chemical Plant in Calgary
----------------------------------------------------

Uncertain Outcome of Dispute with Landlord. As explained elsewhere in this
Annual Report (see Item 3. Legal Proceedings and Note 7 to the consolidated
financial statements of Item 7), our landlord in Calgary is disputing our rights
under our lease of the site where our facility is located and the railway access
that has been granted. Although we believe we have sound a legal basis for our
planned uses of the site, there can be no assurances that the outcome of that
dispute will result in our continued occupation of the site. If we were forced
to vacate the site, it would end our ability to recognize and sublease income
from the facility, and may adversely impact the amount we might otherwise
receive from the sale of equipment from the site.

Uncertainty of Estimates for Plant Decommissioning. In the past, the Calgary
facility produced uranium oxide from phosphoric acid and purified phosphate
products. We have complied with all regulatory requirements for the operation
and temporary decommissioning of the facility, which is inspected annually for
compliance with it operating permit by the Canadian Nuclear Safety Commission.
We have also estimated the future cost for further decommissioning of the
facility in the event that we were to vacate the site and have recorded that
amount as a liability on our consolidated balance sheet. (See Notes 1 and 7 to
the consolidated financial statements of Item 7) The Company has made
significant assumptions concerning the future decommissioning cost associated
with its solvent extraction facility. It is at least reasonably possible that
the Company's estimates could be materially revised within the next year.
Although ESEC has no current intent to terminate the lease and believes the site
is currently in compliance with all regulations, ESEC has accrued and recorded
as a liability of approximately $696,000 as an estimate of the remaining
ultimate costs it would expect to incur to return the facility to the landlord
under the terms of the lease. The amount recorded is an estimate that includes
significant assumptions, and it is reasonably possible that these assumptions
could change in the future and that such a change could be material. Any
significant change to ESEC's estimates could result in further expenses being
recorded at that time.

                                       4
<PAGE>

Limited Market for Idled Equipment May Adversely Affect Both the Ability to Sell
Such Equipment and the Timing of Such Sales. The Company has made significant
assumptions concerning the remaining realizability of its extraction facility
assets. The majority of the idled equipment which we believe does not have
general use and which we intend to sell is specialty equipment designed, in many
cases, for the intended use in purified phosphate production. There does not
appear to be a ready market for such equipment. If the Company were forced to
sell such equipment on a shortened timetable, it is likely it would realize less
than the currently estimated amounts. It is at least reasonably possible that
the Company's estimates could be materially revised within the next year, which
revision would result in the recognition of additional expense.

Raw Materials.
As the term is generally used, raw materials are not essential to the mineral
exploration, acquisition and development activities conducted by the Company.

Patents, Licenses and Franchises.
Registrant holds no patents, licenses, franchises or land contracts that it
considers material in light of its other assets.

ENVIRONMENTAL CONTROLS ARE INCREASING AND COSTLY.
Insofar as ESI may engage in any significant mineral exploration and development
activities, compliance with environmental quality requirements and reclamation
laws imposed by federal, state, provincial, and local governmental authorities
may require significant capital outlays, may materially affect the economics of
a given property, or may cause material changes or delays in any future
activities. In addition to the imposition of requirements which may impact
operations, a number of these environmental laws and regulations impose
permitting requirements related both to the initiation of certain mining
activities as well as to the ongoing operation once mining commences. Local
regulations in the U.S. typically are land use related rather than
environmental. Although environmental regulatory costs to date and those
expected in 2004 are not significant, they may become substantial in the future.
Such costs are considered a part of the ordinary costs of our business. ESI
currently has no significant activities planned on its mineral properties or
prospects in 2004. Such plans are dependent upon the availability of cash flow
from subleasing activities at ESEC.

SEASONALITY OF ACTIVITIES.
The activities performed or planned by the Company are not seasonal, although
winter weather may limit certain activities.

DEPENDENCE ON MAJOR CUSTOMERS.
The Company currently subleases space to two groups in Calgary that account for
all significant revenue recognized in 2002 and 2003.

RESEARCH AND DEVELOPMENT ACTIVITIES.
The Company did not spend material amounts for research and development
activities during the last three years.

EMPLOYEES.
As of December 31, 2003 the Company had no full-time personnel. Personnel are
generally employed on a contract basis for specific project tasks.

Item 2. Description of Property.

Registrant owns, and controls mineral property interests in Colorado, Idaho,
Montana, Nevada and Utah. The following property descriptions contain deposit
references according to the indicated definitions, although it has not been
proven that any of these deposits are commercially viable. Registrant is not
currently pursuing development of any of its exploration properties at this
time. The following is summary information regarding Registrant's principal
properties. For purposes of this item, Mineral Deposit or Mineralized Material
is a mineralized body that has been delineated by appropriately spaced drilling
and/or underground sampling to support a sufficient tonnage and average grade of
metal(s). Such a deposit does not qualify as a reserve until a comprehensive
evaluation based upon unit cost, grade, recoveries, and other material factors
conclude legal and economic feasibility. ESI is developing limited plans for
mineral exploration or development activities in 2004 and intends to maintain
its primary mineral interests.

                                       5
<PAGE>

Mineral Prospects
(a) Vanadium/Phosphate Properties.
Registrant's interests in the properties consist of fee ownership, State of
Idaho mineral leases, a Federal lease and a patented mineral property. The
properties are located near Paris and Bloomington, Idaho and cover approximately
2,100 acres. To date, drill testing on the southern portion of the deposit show
tonnage of approximately 53 million tons of mineralized material. The grade of
the upper bed material of the block is calculated to be 25% P2O5 over a
thickness of 9 feet and the grade of the lower (main) bed material is calculated
to be 30% P2O5 over a 6 foot thickness.

Metallurgical test work on the vanadium bed has resulted in a patent being
issued to Registrant regarding the extraction techniques that were developed as
a result of such work. Registrant is investigating plans for development of the
property, however there can be no assurance that marketing and financing
arrangements can be obtained.

(b) Emigrant Property.
In 1987 Registrant acquired fee ownership of two patented lode-mining claims in
the Emigrant Peak area, Park County, Montana containing approximately 38 acres.
Registrant also owns two other patented placer claims containing 37 acres in the
same area. This block of contiguous mining claims contains copper, molybdenum,
gold, silver, lead and zinc mineralization, which has not yet been fully
delineated.

(c) Alunite Resources.
Alunite is a source of alumina (the raw material of aluminum), potassium sulfate
fertilizer, sulfuric acid and sulfur. Acquisition of Federal alunite mineral
rights is accomplished through Federal Potassium Preference Right Leases issued
under Section 4 of the Leasing Act of February 7, 1927.

     (1) "LC" Alunite Property.
The property is located in southwestern Colorado, about 7 miles south of Lake
City, Colorado and consists of approximately 1,667 acres. The LC property was
sampled with three vertical core holes ranging from 306 feet to 688 feet in
depth. The average thickness of the mineralization, defined as 21.6% alunite or
greater, was approximately 400 feet. The average interval between the holes was
2,000 feet. Results of exploration work to date show a total of 61.1 million
tons of mineralized material. The grade of the material is calculated to average
approximately 39.6% alunite (approximately 14.7% alumina).

In 1978, Registrant applied for a Preference Right Lease for potassium on the
property (a "PRLA"), in 1979 submitted the "initial showing" required in the
lease application and in 1982 submitted the operating plan for an environmental
impact assessment. A Bureau of Land Management advisory panel recommended
approval of the project. However, in 1985 a Congressional resolution suspended
all Preference Right Lease activity in Wilderness Study Areas. Until further
Congressional action is taken, progress on the project will be restricted. In
1991, Registrant received notice from the Department of Interior that the Bureau
of Land Management considers the PRLA as a valid existing right with respect to
any future wilderness designation.

     (2)"NG" Property and Other Utah Alunite Interests.
The properties are located within the southern end of the Wah Wah Mountain range
in southwestern Utah, approximately 38 miles from Milford, Utah. Registrant owns
leases on 700 acres, which are now administered by the State of Utah, School and
Institutional Trust Lands Administration. The previous Federal Potash leases
have been readjusted by the State Trust Lands Administration to allow for a
second term of 20 years commencing February 1, 2003 and ESI has paid the annual
rental and advanced minimum royalty due for 2004. All other required lease
payments were made in 2003. Mineralization on the 700 leased acres was sampled
with 239 drill holes totaling 52,200 feet of drilling. The holes varied in depth
from 10 feet to 900 feet on an approximate grid spaced at 300 feet by 500 feet.
The average thickness of mineralization, defined as 27% alunite or greater, was
approximately 200 feet. Results of exploration and drilling programs on the
properties to date show 129 million tons of mineralized material with a grade
calculated to be 37.9% alunite (approximately 14.03% alumina) with an additional
287 million tons of mineralized material with average grades calculated to range
from 33.5% to 39.4% alunite (approximately 12.4% to 14.6% alumina).

                                       6
<PAGE>

Other Properties
(d) Calgary Facility.
Registrant owns a hydrometallurgical facility that produced purified phosphate
products. The facility occupies a 20,000 square foot building and is located in
southeast Calgary, Alberta on a 12-acre site leased from the adjacent landowner.
Efforts to re-start the facility for purified phosphate products have been
frustrated by a general economic slowdown. Management is seeking sublease
arrangements for other activities at the plant and is in the process of selling
equipment that does not have general use.

Item 3. Legal Proceedings.

During 2001 the landlord of the Calgary facility site, Western Co-Operative
Fertilizers, Ltd. asserted that the cessation of operations at the Calgary
facility has resulted in the termination of the easement under which a rail line
services the site and threatened to take steps to prohibit the use of and
ultimately remove the improvements on the easement right-of-way. In January
2002, ESI Resources Ltd. filed with the Court Of Queen's Bench of Alberta in the
Judicial District of Calgary a Statement of Claim and a Notice of Motion. The
Statement of Claim and the Motion seek a motion for injunctive relief to
restrain the landlord from interfering with use of the rail line. The landlord
has agreed to an adjournment of the matter to a future date and has agreed not
to interfere with the use of the rail line until the date of the hearing of the
Company's application. In September 2002, the landlord filed their Statement of
Defense and a Counterclaim asserting termination of the easement, the site lease
and another underlying agreement, requesting an order from the Court to that
affect and seeking damages in the amount of $6 million Canadian to remediate,
restore and reclaim the leased site and easement. In December 2002 the Company
filed a Statement of Defence to the Counterclaim vigorously denying (i) breach
of any obligation under the lease or easement, (ii) the landlord's
characterization of the cessation of operations, (iii) the termination of the
easement and site lease, and (iv) that any amounts are due for reclamation of
the site. Discussions held with the landlord in 2003 aimed at reaching a
settlement were unsuccessful. The parties have begun the process of discovery
and are presently preparing to further define the issues between them.
Registrant will continue to defend its rights for this rail line access to the
site.

Registrant knows of no other reportable pending legal matters involving
Registrant or its subsidiaries.

Item 4. Submission of Matters to a Vote of Security Holders.

None.

PART II

Item 5. Market for Common Equity, Related Stockholder Matters and Small Business
        Issuer Purchases of Equity Securities.

(a) Market Information.
Registrant's common stock currently trades on the OTCBB market under the symbol
ESCI.

                          Price Ranges (high and low closing bid prices)
                                    2003                  2002
                                    ----                  ----
1st Quarter                    $ .25  -  .20         $ .33  -  .30
2nd Quarter                      .23  -  .20           .40  -  .30
3rd Quarter                      .39  -  .05           .36  -  .24
4th Quarter                      .04  -  .03           .30  -  .22

The price ranges shown are based on OTCBB quotations. The sale prices may
reflect inter-dealer prices, without retail mark-up, markdown or commission and
may not represent actual transactions.

(b) Holders.
The number of record holders of common stock, one-cent par value, of Registrant
as of March 14, 2003 was approximately 1,900; the approximate number of
beneficial shareholders is estimated at 9,000.

(c) Dividends.
Registrant has not paid dividends since its inception and there are no plans for
paying dividends in the foreseeable future.

                                       7
<PAGE>

Item 6. Management's Discussion and Analysis or Plan of Operation.
This Annual Report may contain forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933 that involve risks and uncertainties.
In particular such forward-looking statements may be found in this section and
under the heading "Description of Business." The following discussion and
analysis of the financial condition and results of operations of the Company
should be read in conjunction with the consolidated financial statements and
related notes thereto included elsewhere in this report. Words or phrases such
as "will," "hope," "expect," "intend," "plan" or similar expressions are
generally intended to identify forward-looking statements. Those statements
involve risks and uncertainties that could cause actual results to differ
materially from the results discussed herein. The principal risks and
uncertainties that may affect the Company's actual performance and results of
operations include the following: general economic conditions; adverse weather;
changes in federal income tax laws; governmental regulation; changes in
governmental and public policy; changes in economic conditions specific to one
or more of the Company's markets and businesses; competition; availability of
raw materials; and unexpected operations difficulties. Other risks and
uncertainties may also affect the outcome of the Company's actual performance
and results of operations. You are cautioned not to place undue reliance on the
forward-looking statements made in this Management's Discussion and Analysis of
Financial Condition and Results of Operation.

Liquidity and Capital Resources
In March 2003 ADA-ES and ESI entered into an agreement (the Distribution
Agreement) for the pro rata distribution of all the common stock of ADA-ES to
the shareholders of ESI based on a record date of August 29, 2003 as determined
by the ESI Board of Directors. The Distribution Agreement required certain
allocations of cash and liabilities among ESI and ADA-ES prior to the
distribution of the ADA-ES common stock. The spin-off took place on September
12, 2003 when ESI distributed approximately 3.3 million shares of the Company's
common stock to its shareholders.

The Company had a working capital deficit of $106,000 at 12/31/03. The amount
represents an increase of approximately $177,000 due to the effects of the
spin-off transactions as discussed below. Included in current liabilities are
amounts for certain notes payable totaling $195,000 which arose from the prior
purified phosphate operations in Calgary, which at present the Company does not
intend to pay. The creditors under those notes have not initiated any
significant collection action against the Company. Maintenance of an acceptable
level of working capital will be dependent on the Company generating cash flow
from the sale of surplus equipment and subleasing operations in Calgary and
reducing the holding costs or selling some of it's mineral interests. The
Company is seeking partnering and joint venture relationships to conduct and
expand operations in order to meet its funding requirements. There can be no
assurances that partnering and joint venture relationships can be arranged to
continue and expand its operations.

As required under the Distribution Agreement with ADA-ES, in September 2003
ADA-ES transferred $100,000 in cash to the Company and assumed notes payable to
Tectonic Construction Co. totaling $1,150,000. ADA-ES also assumed other
indebtedness from ESI in the amount of $130,000 related to deferred compensation
for past ESI employees.

The Company currently has no plans for any capital expenditures.

Although the Company has significant net operating loss carryforwards for U.S.
tax purposes and Canadian tax assets, the Company has determined that it is more
probable than not that those deferred tax assets will not be realized in the
foreseeable future, and so has reduced those assets by a valuation allowance to
a net of zero.

Cash flow used in operations totaled $(271,000) for 2003 compared to a use of
$(283,000) for 2002. The amount for 2003 resulted primarily from net loss plus
non-cash charges for the provision for losses on accounts receivable and changes
in foreign currency less the equity in earnings of ADA-ES and changes in other
assets and liabilities. The amount for 2002 resulted primarily from net income
plus non-cash charges for stock issued for services less the equity in earnings
of ADA-ES and changes in other assets and liabilities. Cash flow from financing
activities for 2003 and 2002 include advances and distributions from ADA-ES of
$354,000 and $356,000, respectively. And, in 2002 a use of $121,000 in payments
on notes payable and long-term debt.

Results of Operations
Revenues for 2003 totaled $68,000 as compared to $74,000 in 2002. Revenues for
both periods represented primarily amounts invoiced for rental of a portion of
the Calgary facility.

The majority of operating expenses are currently covered by the tenants in
Calgary, but are expected to increase, as the Company seeks to expand its
activities there. Operating expenses were $33,000 for 2003 as compared to
$50,000 for 2002.

General and administrative expenses decreased by $25,000 to $89,000 for 2003 as
compared to 2002 due to decreased legal fees offset somewhat by increased
accounting and other expenses. In 2003 the Company recorded a provision for
doubtful accounts receivable totaling $92,000 related to its subleasing
activities.

                                       8
<PAGE>

Our interest expense totaled approximately $107,000 for 2003 and $138,000 for
2002. The decrease in interest expense is due to a pay down principal during the
year and the assumption by ADA-ES of the Tectonic debt described above.

In 2003 and 2002, we recorded our equity in the net income of ADA-ES up through
the date of the spin-off of $192,000 and $469,000, respectively.

Critical Accounting Policies and Estimates
As previously discussed, the Company's critical accounting policies and
estimates include the estimated reclamation liability recorded in connection
with the Calgary facility. Other significant estimates used in preparation of
the financial statements include the Company's allowance for doubtful accounts,
which is based on historical experience.

The Company has also estimated the net residual of its equipment at the Calgary
facility to be approximately $400,000, which is included in other assets. This
estimate could change based on many factors, including the ultimate outcome of
the litigation noted above.

As with all estimates, the amounts described above are subject to change as
additional information becomes available.

The Calgary facility is located on a site leased from the adjacent landowner who
originally supplied feedstock to the facility in the 1980's. The lease has an
indefinite term, but upon ESEC's permanent termination of operations, ESEC has a
period of 24 months to remove all equipment, improvement and structures erected
on the site after which time such assets become the sole property of the
landlord. ESEC also has the obligation to return the site and any surrendered
assets to the landlord in a safe condition that complies with the requirements
of all statues, regulations and ordinances. Although ESEC has no current intent
to terminate the lease and believes the site is currently in compliance with all
regulations, ESEC has accrued and recorded as a liability of approximately
$696,000 as an estimate of the ultimate costs it would expect to incur to return
the facility to the landlord under the terms of the lease. The amount recorded
is an estimate that includes significant assumptions, and it is reasonably
possible that these assumptions could change in the future, and that such a
change could be material. The landlord commissioned a Phase 1 environmental
study of the leased site. Although this Phase 1 study did not include any costs
estimates, the landlord has estimated the cost substantially higher than ESEC's
estimated costs. The difference in estimates primarily relates to ESEC basing
its estimate on revised quantities of the waste on site, assumptions regarding
future use of the building (including the future cost to demolish the building),
and supervision costs. Any significant change to ESEC's estimates could result
in further expenses being recorded at that time.

If the Company should abandon, dispose or otherwise cease operations in Canada,
the cumulative foreign currency adjustment recorded as a contra equity amount of
$1,837,000 will be recorded as an operating expense. Such adjustment, however,
will have no effect on net equity.


Item 7. Financial Statements. (see pages F-1 through F-22)

Index to Financial Statements
Independent Auditor's Report
Financial Statements:
     Earth Sciences, Inc. and Subsidiaries
     Consolidated Balance Sheet, December 31, 2003
     Consolidated Statements of Operations, For the Years Ended December 31,
     2003 and 2002
     Consolidated Statement of Changes in Stockholders' Deficit, For the Period
     from January 1, 2002 to December 31, 2003
     Consolidated Statements of Cash Flows, For the Years Ended December 31,
     2003 and 2002
     Notes to Consolidated Financial Statements


Item 8. Changes In and Disagreements With Accountants on Accounting and
        Financial Disclosure.

None.

                                       9
<PAGE>

Item 8A. Controls and Procedures.

Disclosure Controls and Procedures
The Company maintains disclosure controls and procedures designed to ensure that
it is able to collect the information it is required to disclose in the reports
it files with the Securities and Exchange Commission (SEC), and to process,
summarize and disclose this information within the time periods specified in the
rules of the SEC. Based on their evaluation of the Company's disclosure controls
and procedures which took place as of a date within 90 days of the filing date
of this report, the Chief Executive and Financial Officer believes that these
controls and procedures are effective to ensure that the Company is able to
collect, process and disclose the information it is required to disclose in the
reports it files with the SEC within the required time periods.

The Company also maintains a system of internal controls designed to provide
reasonable assurance that: transactions are executed in accordance with
management's general or specific authorization; transactions are recorded as
necessary (1) to permit preparation of financial statements in conformity with
generally accepted accounting principles, and (2) to maintain accountability for
assets; access to assets is permitted only in accordance with management's
general or specific authorization; and the recorded accountability for assets is
compared with the existing assets at reasonable intervals and appropriate action
is taken with respect to any differences.

Since the date of the most recent evaluation of the Company's internal controls
by the Chief Executive and Financial Officer, there have been no significant
changes in such controls or in other factors that could have significantly
affected those controls, including any corrective actions with regard to
significant deficiencies and material weaknesses.


PART III

Item 9. Directors, Executive Officers, Promoters and Control Persons; Compliance
        With Section 16(a) of the Exchange Act.
<TABLE>
<CAPTION>

                                                                   Term       First Became
     Name           Age   Position and Offices                    Expires       Director
     ----           ---   --------------------                    -------       --------
<S>                 <C>   <C>                                  <C>               <C>
Ramon E. Bisque     72    Chairman of the Board of Directors   Annual Meeting     1963
                                                                 Date, 2004

Duane N. Bloom      70    Director and Secretary                     "            1963

Mark H. McKinnies   52    Director, President and Treasurer          "            1983
</TABLE>

     Each of the officers named above serves from year to year at the pleasure
of the Board of Directors. Drs. Bisque and Bloom were first elected to the Board
of Directors of Earth Sciences, Inc.`s predecessor company as of February 14,
1963. Drs. Bisque and Bloom were first elected to serve in their present offices
on March 22, 1974. Mr. McKinnies was elected Controller on January 25, 1980,
Secretary on January 23, 1981 and as a Director and President on February 23,
1983.

Dr. Bisque is Professor Emeritus at the Colorado School of Mines, Golden,
Colorado and was a co-founder of Earth Sciences, Inc. in 1963. Dr. Bisque has
been Chairman of the Board of Directors and a full or part time employee of
Registrant since 1974. Dr. Bisque is Chairman of the Board of ADA-ES, Inc.

Dr. Bloom was a co-founder of Earth Sciences, Inc. in 1963. Dr. Bloom was
employed full time by Registrant since that time through 1999. Dr. Bloom is a
Director of ADA-ES, Inc.

Mr. McKinnies is a CPA and worked for Peat, Marwick, Mitchell & Co. before
commencing employment at ESI in 1978. Mr. McKinnies was elected President of
Registrant in February 1983. Mr. McKinnies is the CFO and a Director of ADA-ES,
Inc.

                                       10
<PAGE>

No family relationship exists between any individuals named in this Item 9.

No Audit Committee
The Board of Directors has yet to appoint an Audit Committee and therefore does
not have an Audit Committee Financial Expert but intends to pursue one as soon
as practical.

Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934 requires Registrant's
officers and directors, and persons who own more than ten percent of a
registered class of the Company's equity securities, to file reports of
ownership with the Securities and Exchange Commission (the "SEC"). Officers,
directors and greater than ten percent shareholders are required by SEC
regulation to furnish the Company with copies of all Section 16(a) forms they
file.

Based solely on its review of the copies of such forms received by it, or
written representations from certain reporting persons, Registrant believes that
during the fiscal year ended December 31, 2003, all filing requirements
applicable to its officers, directors and greater than ten percent beneficial
owners were met.

Code of Ethics
The Company has adopted a Code of Ethics for Senior Financial Officers that is
applicable to our principal executive officer, principal financial officer,
principal accounting officer or controller, or persons performing similar
functions. A copy of our Code of Ethics for Senior Financial Officers is filed
as an exhibit to this annual report on Form 10KSB.

Item 10. Executive Compensation.

Officer and director compensation for ESI, as noted below, has been paid by
ADA-ES prior to the spin-off discussed above in Item 1. No compensation has been
paid by the Company subsequent to the spin-off.

                           Summary Compensation Table

                                              Annual Compensation(1)
     Name of Individual and                   ----------------------
     Principal Position         Year          Salary        Other(2)
     ------------------         ----          ------        --------

     Mark H. McKinnies          2003         $110,831        $25,749
     Director and President     2002         $149,156        $35,628
                                2001         $137,989        $33,698

     (1)  Amounts shown represent payments made by ADA-ES through the date of
          the spin-off, September 11, 2003. No compensation has been paid by ESI
          since that date.
     (2)  Amounts represent discretionary pension contributions, 401(k)
          deferrals and matching payments made to a qualified plan by ADA-ES for
          the benefit of Mr. McKinnies. In all years such amounts include stock
          issued by the Company or ADA-ES for the discretionary pension
          contribution portion of such payments averaging 40% of the amounts
          shown.

                     Options/SAR Grants in Last Fiscal Year
                                Individual Grants
None

    Aggregated Option Exercises in Last Fiscal Year and FY-End Option Values
None


Compensation of Directors
Directors are accruing compensation in the amount of $500 per quarter, which
amount may be paid by issuance of Registrant's common stock, and are reimbursed
for any out-of-pocket expenses incurred in attendance at meetings.

                                       11
<PAGE>

Item 11. Security Ownership of Certain Beneficial Owners and Management and
         Related Stockholder Matters.

The following table sets forth the number of shares of the Registrant's common
stock owned beneficially as of March 19, 2004, by each person known by
Registrant to have owned beneficially more than five percent of such shares then
outstanding, by each person serving as a named officer and/or a director of
Registrant and by all of Registrant's officers and directors as a group. Except
as indicated in the footnotes below, each of the individuals named below has
sole voting and investment power for the respective shares.
<TABLE>
<CAPTION>

                                                        Amount and Nature of
  Name and Address                                      Beneficial Ownership    Percent of Class
  ----------------                                      --------------------    ----------------
  <S>                                                          <C>                     <C>
  Ramon E. Bisque (Chairman of the Board of Directors)         707,468 (1)             2.1%
  910 12th Street
  Golden, CO

  Duane N. Bloom (Director and Secretary)                      531,631 (2)             1.6%
  5565 Pine Ridge
  Rd. Golden, CO

  Mark H. McKinnies (Director and President)                   581,107 (3)             1.7%
  8100 SouthPark Way, B
  Littleton, CO

  Directors and Officers as a Group (3 individuals)          1,820,206                 5.4%

Notes:
(1)  Included in the amount shown are 1,000 shares registered in the name of Dr.
     Bisque's wife and 162,812 shares held in Dr. Bisque's pension fund account.
(2)  Included in the amount shown are 7,725 shares registered in the name of Dr.
     Bloom's wife and 251,087 shares held in Dr. Bloom's pension fund account.
(3)  Included in the amount shown are 304,911 shares held in Mr. McKinnies'
     pension fund account.

                                      Equity Compensation Plan Information

                                                                                  Number of securities remaining
                                 Number of securities to   Weighted-average       available for future issuance
                                 be issued upon exercise   exercise price of      under equity compensation plans
                                 of outstanding options,   outstanding options,   (excluding securities reflected
Plan category                    warrants and rights       warrants and rights    in column (a))
-------------                    -----------------------   --------------------   -------------------------------
                                          (a)                     (b)                          (c)
Equity compensation plans
approved by security holders               --                     N/A                        980,732

Equity compensation plans not
approved by security holders (1)           --                     N/A                         15,000
                                        -------                 ------                       -------
Total                                      --                     N/A                        995,732
                                        =======                 ======                       =======

(1) The Company has no other equity compensation plans in place, however as
noted above the accrued directors' fees may be paid by issuance of the common
stock of the Company.

                                       12
</TABLE>
<PAGE>

Stock Bonus Plan
The Company has reserved 125,000 shares for awards under a stock bonus plan
established in 1978. As of December 31, 2003, 15,000 shares remain available for
award under the plan.

2000 STOCK OPTION PLAN
The Company's 2000 Stock Option Plan was adopted by the Board on December 7,
2000 and approved by the shareholders in August 2001. The Plan authorizes the
grant of options to purchase shares of the Company's Common Stock. The purpose
of the Plan is to promote the growth and profitability of the Company by
awarding options to purchase Common Stock of the Company for services performed.
On December 7, 2000 the Board granted incentive stock options covering 1,121,524
shares of Common Stock to select employees of subsidiaries of the Company,
including two officers and directors of the Company, under the Plan. The option
exercise price of $.25 per share for those stock options was the market price on
the date of the grant. Of that amount 140,792 shares were issued upon exercise
and the balance of the options granted have either expired due to termination of
employment or been rescinded when such options were duplicated by ADA-ES in the
spin-off. As a result, 980,732 shares remain authorized for future issuance
under the Plan. Options may be granted under the Plan to any officer or
full-time employee of the Company or its subsidiaries.

Item 12. Certain Relationships and Related Transactions.

In 2000, ESI re-negotiated a convertible debenture in the amount of $1,000,000
(the "Debenture") with Tectonic Construction Co. ("TCC") and a note in the
amount of $250,000 (the "Note") from TCC to extend the due dates and clarify
certain collateral. Mr. Lowdermilk, a past director of Registrant, is the
president and majority shareholder of TCC. The Debenture and the Note bore
interest at the greater of prime plus two points or 10% which interest was
payable quarterly. As required under the Distribution Agreement with ADA-ES, in
September 2003 ADA-ES assumed the remaining balance of the notes payable to
Tectonic Construction Co. totaling $1,150,000. ADA-ES also assumed other
indebtedness from ESI in the amount of $130,000 related to past service
obligations ($77,000 payable for the benefit of Mr. McKinnies and $44,200
payable for the benefit of Dr. Bisque, both Directors of the Company).

Item 13. Exhibits and Reports on Form 8-K.

(a) Exhibits and Index of Exhibits (all exhibits except as otherwise noted are
incorporated by reference; Exhibit 10.2 was filed as an exhibit to Registrant's
1997 Form 10KSB, Exhibit 3.1 was filed as an exhibit to Registrant's 1998 Form
10KSB, Exhibits 10.3 and 10.4 were filed as an exhibits to Registrant's 2002
Form 10-KSB; Exhibit 10.5 was filed as an exhibit to Registrant's Form S-8 filed
April 22, 2003; all other such Exhibits were filed as exhibits to Registrant's
1993 Form 10KSB).

No.                      Description
---                      -----------
3.1       Articles of Incorporation, as amended and restated.
3.2       By-laws.
10.1      Lease dated April 3, 1978 between Western Co-operative Fertilizers,
          Limited and ESI Resources, Ltd.
10.2      Assignment of Net Profits Interest dated November 1, 1997 from
          Registrant, ESI Resource Limited, and Earth Sciences Extraction
          Company to Yankee Atomic Electric Company and Vermont Yankee Nuclear
          Power Corporation.

10.3      Earth Sciences, Inc. 2000 Stock Option Plan dated December 7, 2000
10.4      Distribution Agreement between Earth Sciences, Inc. and ADA-ES, Inc.
          dated March 17, 2003
10.5      2003 Stock Compensation Plan #1
14*       Code of Ethics for Senior Financial Officers
21.1*     Subsidiaries of Registrant.
23.1*     Consent of Hein + Associates LLP
31.1*     Certification of Chief Executive and Chief Financial Officer of
          ADA-ES, Inc. Pursuant to 17 CFR 240.13a-14(a) or 17 CFR 240.15d-14(a)
32.1*     Certifications Pursuant to 18 U.S.C. Section 1350

(*) - filed herewith.

(b) Reports on Form 8-K.

                                       13
<PAGE>

On November 7 2003 Registrant filed a Form 8K reporting Item 5. Other Events and
Regulation FD Disclosures, which included Exhibit 99.1 - November 7, 2003 Press
Release announcing Third Quarter Financial Results.

Item 14. Principal Accountant Fees and Services.

                                           Fiscal Year
                                   --------------------------
                                     2002               2003
                                   -------            -------
Audit Fees                         $54,095            $66,267
Audit-Related Fees                    --                 --
Tax Fees                              --                 --
All Other Fees (1)                 $ 2,980            $19,021

The above amounts include combined services provided for Registrant and ADA-ES
for 2002 and a portion of 2003, where such services could not be divided into
their components. (1) Registrant's principal accountant provided review and
consulting services related to the filing of a Form 10SB with the SEC to effect
the spin-off from Earth Sciences.

Audit Committee Approval of Services
Although the Company does not presently have an Audit Committee, it is the
intended policy of the Audit Committee of the Company, when it is formulated, to
approve the engagement to render audit or non-audit services before the
accountant is engaged by the Company.


SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the Registrant has
duly caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.

Earth Sciences, Inc.
--------------------
(Registrant)

By /s/ Mark H. McKinnies                    /s/ Ramon E. Bisque
------------------------                    -------------------
Mark H. McKinnies, President                Ramon E. Bisque
and Principal Financial Officer             Chairman of The Board of Directors

Date:   March 26, 2004                      March 26, 2004
        --------------                      --------------

In accordance with the Exchange Act, this report has been signed below by the
following persons on behalf of the Registrant and in the capacities and on the
dates indicated.

/s/ Ramon E. Bisque                         /s/ Duane N. Bloom
-------------------                         ------------------
Ramon E. Bisque                             Duane N. Bloom
Chairman of The Board of Directors          Director

March 26, 2004                              March 26, 2004
--------------                              --------------
Date                                        Date


/s/ Mark H. McKinnies
---------------------
Mark H. McKinnies
Director

March 26, 2004
--------------
Date

                                       14
<PAGE>




                          INDEX TO FINANCIAL STATEMENTS


                                                                            PAGE
                                                                            ----

Independent Auditor's Report.................................................F-2

Consolidated Balance Sheet - December 31, 2003...............................F-3

Consolidated Statements of Operations - For the Years Ended
    December 31, 2003 and 2002...............................................F-4

Consolidated Statements of Changes in Stockholders' Deficit -
    For the Years Ended December 31, 2003 and 2002...........................F-5

Consolidated Statements of Cash Flows - For the Years Ended
    December 31, 2003 and 2002...............................................F-6

Notes to Consolidated Financial Statements...................................F-7







                                       F-1
<PAGE>




                          INDEPENDENT AUDITOR'S REPORT




To the Board of Directors and Stockholders
Earth Sciences, Inc. and Subsidiaries
Golden, Colorado


We have audited the accompanying consolidated balance sheet of Earth Sciences,
Inc. and subsidiaries as of December 31, 2003, and the related consolidated
statements of operations, changes in stockholders' deficit and cash flows for
the years ended December 31, 2003 and 2002. These consolidated financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these consolidated financial
statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Earth Sciences, Inc.
and subsidiaries as of December 31, 2003, and the results of their operations
and their cash flows for the years ended December 31, 2003 and 2002, in
conformity with accounting principles generally accepted in the United States of
America.

The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 2 to the
financial statements, the Company does not have significant continuing revenues,
has spun-off its primary operating subsidiary, incurred a loss for continuing
operations of $381,000 in 2003 and is involved in significant litigation with
respect to its Canadian properties. These conditions raise substantial doubt
about the Company's ability to continue as a going concern. Management's plans
regarding those matters also are described in Note 2. The financial statements
do not include any adjustments that might result from the outcome of this
uncertainty.



/s/ HEIN & ASSOCIATES LLP
-------------------------
HEIN & ASSOCIATES LLP

Denver, Colorado
February 18, 2004

                                      F-2
<PAGE>

                      EARTH SCIENCES, INC. AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEET
                                DECEMBER 31, 2003



                                     ASSETS
                                     ------
CURRENT ASSETS:
    Cash and cash equivalents                                      $     83,000
    Receivables, with allowance for doubtful accounts of $92,000          1,000
    Inventories                                                           7,000
    Prepaid expenses                                                     33,000
                                                                   ------------
             Total current assets                                       124,000
                                                                   ------------
MINERAL RIGHTS                                                          338,000

OTHER ASSETS, net                                                       395,000
                                                                   ------------
TOTAL ASSETS                                                       $    857,000
                                                                   ============
                     LIABILITIES AND STOCKHOLDERS' DEFICIT
                     -------------------------------------
CURRENT LIABILITIES:
    Notes payables, vendors                                        $    195,000
    Accounts payable                                                     13,000
    Accrued expenses                                                     22,000
                                                                   ------------
             Total current liabilities                                  230,000
                                                                   ------------

LONG-TERM LIABILITIES:
    Other liabilities                                                   238,000
    Deferred plant decommissioning                                      696,000
                                                                   ------------
             Total long-term liabilities                                934,000
                                                                   ------------


COMMITMENTS AND CONTINGENCIES (Notes 2 and 9)

STOCKHOLDERS' DEFICIT:
    Common stock, $.01 par value; 50,000,000 shares authorized;
         33,445,000 shares issued and outstanding                       335,000
    Additional paid-in capital                                       27,200,000
    Accumulated deficit                                             (26,005,000)
    Foreign currency translation adjustment                          (1,837,000)
                                                                   ------------
             Total stockholders' deficit                               (307,000)
                                                                   ------------
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT                        $    857,000
                                                                   ============


              See accompanying notes to these financial statements.

                                       F-3
<PAGE>

                      EARTH SCIENCES, INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF OPERATIONS


                                                        FOR THE YEARS ENDED
                                                            DECEMBER 31,
                                                   ----------------------------
                                                       2003            2002
                                                   ------------    ------------
REVENUE:
    Rental income, including direct
       reimbursements                              $     68,000    $     74,000

COST AND EXPENSES:
    Operating costs                                      33,000          50,000
    General and administrative                           89,000         114,000
    Provision for doubtful accounts                      92,000            --
                                                   ------------    ------------
         Total expenses                                 214,000         164,000
                                                   ------------    ------------

OPERATING LOSS                                         (146,000)        (90,000)

OTHER INCOME (EXPENSE):
    Interest expense                                   (107,000)       (138,000)
    Foreign currency translation                       (128,000)          2,000
                                                   ------------    ------------
             Total other income (expense)              (235,000)       (136,000)
                                                   ------------    ------------

LOSS BEFORE DISCONTINUED OPERATIONS                    (381,000)       (226,000)

    Income from discontinued operations                 192,000         469,000
                                                   ------------    ------------

NET (LOSS) INCOME                                  $   (189,000)   $    243,000
                                                   ============    ============

NET (LOSS) INCOME PER SHARE (BASIC AND DILUTED):
    Loss before discontinued operations            $       (.01)   $       (.01)
                                                   ============    ============
    Discontinued operations                        $        .01    $        .02
                                                   ============    ============
    Net (loss) income per share (rounded)          $       (.01)   $        .01
                                                   ============    ============

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING -
    BASIC AND DILUTED                                33,420,000      32,957,000
                                                   ============    ============


              See accompanying notes to these financial statements.

                                       F-4
<PAGE>
<TABLE>
<CAPTION>

                                             EARTH SCIENCES, INC. AND SUBSIDIARIES

                                 CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT
                                        FOR THE YEARS ENDED DECEMBER 31, 2003 AND 2002



                                                                       ADDITIONAL                    CUMULATIVE
                                               COMMON STOCK             PAID-IN      ACCUMULATED     TRANSLATION
                                          SHARES          AMOUNT        CAPITAL        DEFICIT       ADJUSTMENTS         TOTAL
                                       ------------    ------------   ------------   ------------    ------------    ------------
<S>                                     <C>           <C>            <C>            <C>             <C>             <C>
BALANCES, January 1, 2002                32,745,000    $    328,000   $ 28,573,000   $(26,059,000)   $ (1,837,000)   $  1,005,000

    Stock options exercised                 141,000           1,000         34,000           --              --            35,000
    Stock issued to employees for
      services                              478,000           5,000        139,000           --              --           144,000
    Net income                                 --              --             --          243,000            --           243,000
                                       ------------    ------------   ------------   ------------    ------------    ------------

BALANCES, December 31, 2002              33,364,000         334,000     28,746,000    (25,816,000)     (1,837,000)      1,427,000

    Distribution of subsidiary's
      stock                                                             (1,565,000)          --              --        (1,565,000)
    Stock issued to employees for
      services                               81,000           1,000         19,000           --              --            20,000
    Net loss                                   --              --             --         (189,000)           --          (189,000)
                                       ------------    ------------   ------------   ------------    ------------    ------------

BALANCES, December 31, 2003              33,445,000    $    335,000   $ 27,200,000   $(26,005,000)   $ (1,837,000)   $   (307,000)
                                       ============    ============   ============   ============    ============    ============






                             See accompanying notes to these consolidated financial statements.

                                                            F-5
<PAGE>

                              EARTH SCIENCES, INC. AND SUBSIDIARIES

                              CONSOLIDATED STATEMENTS OF CASH FLOWS

                                                                           FOR THE YEARS ENDED
                                                                               DECEMBER 31,
                                                                       --------------------------
                                                                           2003           2002
                                                                       -----------    -----------
CASH FLOWS FROM OPERATING ACTIVITIES:
    Net (loss) income                                                  $  (189,000)   $   243,000
    Adjustments to reconcile net loss to net cash used by
         operating activities:
             Earnings in discontinued operations                          (192,000)      (469,000)
             Expenses paid with common stock                                  --           10,000
             Provision for losses on accounts receivable                    92,000           --
             Change in foreign currency                                    129,000         (5,000)
             Changes in operating assets and liabilities:
                 (Increase) decrease in:
                      Receivables                                          (50,000)       (24,000)
                      Other assets                                           5,000          3,000
                 Increase (decrease) in:
                      Accounts payable                                     (23,000)       (23,000)
                      Accrued expenses                                     (18,000)       (18,000)
                      Deferred plant decommissioning                       (25,000)          --
                                                                       -----------    -----------
         Net cash used by operating activities                            (271,000)      (283,000)

CASH FLOWS FROM INVESTING ACTIVITIES:
    Capital expenditures                                                      --            4,000
                                                                       -----------    -----------
         Net cash used by operating activities                                --            4,000

CASH FLOWS FROM FINANCING ACTIVITIES:
    Cash distribution from discontinued operation                          354,000        356,000
    Payments on notes payable and long-term debt                              --         (121,000)
                                                                       -----------    -----------
         Net cash provided in financing activities                         354,000        235,000
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                            83,000        (44,000)
CASH AND CASH EQUIVALENTS, beginning of year                                  --           44,000
                                                                       -----------    -----------
CASH AND CASH EQUIVALENTS, end of year                                 $    83,000    $      --
                                                                       ===========    ===========
SUPPLEMENTAL SCHEDULE OF CASH FLOW INFORMATION:
    Cash payments for interest                                         $    80,000    $   158,000
                                                                       ===========    ===========
    Stock and options issued for services (included in discontinued
      operations)                                                      $    20,000    $   134,000
                                                                       ===========    ===========
    Distribution of ADA-ES stock resulting from spin-off               $ 1,565,000    $      --
                                                                       ===========    ===========
    Transfer of debt to spun-off subsidiary                            $ 1,150,000    $      --
                                                                       ===========    ===========
    Transfer of accrued expenses to spun-off subsidiary                $   132,000    $      --
                                                                       ===========    ===========
    Exercise of stock options by cancellation of accrued liabilities   $      --      $    35,000
                                                                       ===========    ===========


                      See accompanying notes to these financial statements.

                                               F-6
</TABLE>
<PAGE>

                      EARTH SCIENCES, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


1.   SUMMARY OF NATURE OF OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES:
     --------------------------------------------------------------------

     Nature of Operations - The accompanying consolidated financial statements
     include the accounts of Earth Sciences, Inc. (ESI) and its wholly-owned
     subsidiary, ESI Resources Limited (ESIR). ESIR's only asset is its
     investment in its wholly-owned subsidiary, Earth Sciences Extraction
     Company (ESEC). All significant intercompany transactions have been
     eliminated. Collectively, these entities are referred to as the Company.

     The Company is principally engaged in seeking partners for its idled
     chemical plant in Calgary and maintaining its holdings in several mineral
     prospects in the western U.S. and elsewhere.

     Cash Equivalents - For purposes of the statement of cash flows, the Company
     considers all highly liquid debt instruments with original maturities of
     three months or less to be cash equivalents.

     Receivables and Credit Policies - Receivables are uncollateralized
     sub-lease obligations due monthly under normal terms. Management reviews
     receivables periodically and reduces the carrying amount by a valuation
     allowance that reflects management's best estimate of the amount that may
     not be collectible.

     Inventories - Inventories are stated at the lower of cost or market,
     determined by the first-in, first-out method and consist of supplies.

     Mineral Rights - Under the Company's current operating plan, it does not
     intend to ultimately mine its mineral properties, but rather, sell an
     interest in the properties to an industry partner for cash and/or a
     royalty. Mineral rights are stated at cost and are owned by fee or lease
     title in either the property and/or the underlying mineral interest.

     Other Assets and Liabilities - Other assets consist primarily of the
     Calgary facility of $395,000, which amount has been reduced to reflect
     management's estimate of net recoverable value. Other liabilities consist
     of costs and accrued interest related to the original construction of the
     Calgary facility, payable only out of net cash flow from operation of the
     facility.

     Impairment of Long-Lived Assets - The Company follows Statement of
     Financial Accounting Standards (SFAS) No. 121, Impairment of Long-Lived
     Assets. In the event that facts and circumstances indicate that the cost of
     assets or intangible assets may be impaired, an evaluation of
     recoverability would be performed. The Company believes all long-term
     assets are stated at amounts below their net realizable value.

     Decommissioning Liabilities - The Company has established a remaining
     decommissioning liability of $696,000. As the Calgary facility is not in
     operation, this amount is not discounted; however, it is not reflected as a
     current liability as the Company does not expect to incur such costs within
     the next twelve months. The related asset associated with this liability
     has been substantially impaired in prior years. This is a significant
     estimate and subject to change. Furthermore, the Company is in litigation
     for which one aspect is the future restoration and remediation of the site
     (see Note 9).

                                      F-7
<PAGE>

                      EARTH SCIENCES, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


     Income Taxes - The Company accounts for income taxes under the liability
     method of SFAS No. 109, whereby current and deferred tax assets and
     liabilities are determined based on tax rates and laws enacted as of the
     balance sheet date.

     Foreign Currency Translation - Through September 30, 1997, the accounts of
     ESEC were maintained in Canadian dollars, its functional currency at that
     time. Assets and liabilities were translated into U.S. dollars at the
     current exchange rate, and earnings or losses were translated at the
     average exchange rate for the year; resulting translation adjustments were
     recorded as a separate component of stockholders' equity.

     During 1997, ESEC ended its construction and start-up phase of the Calgary
     plant and commenced production and sales activities of its primary product.
     While in operation, the Company purchased most of its raw materials and
     sold most of its products from/to U.S. entities in U.S. dollars and as a
     result, ESEC changed its functional currency from Canadian dollars to U.S.
     dollars during 1997. Accordingly, effective October 1, 1997, current assets
     and liabilities denominated in Canadian are translated in U.S. dollars at
     the current exchange rate with any resulting gain or loss recorded in the
     income statement.

     If the Company should abandon, dispose or otherwise cease operations in
     Canada, the cumulative foreign currency adjustment recorded as a contra
     equity amount of $1,837,000 will be recorded as an operating expense. Such
     adjustment, however, will have no effect on net equity.

     Revenue Recognition - Rental income is recognized as the Company provides
     space under arrangements that create a formal obligation to pay with no
     right of return on the part of the renter. During the years ended December
     31, 2003 and 2002, the Company recognized $68,000 and $74,000,
     respectively, of rental income under informal sub-lease arrangements at the
     Calgary facility. The amount includes direct reimbursement of utility costs
     of $27,000 and $30,000 in 2003 and 2002, respectively.

     Net Income (Loss) Per Share - Net income (loss) per common share is
     presented in accordance with the provisions of SFAS No. 128, Earnings Per
     Share. Basic EPS is calculated by dividing the income available to common
     shareholders by the weighted average number of common shares outstanding
     for the period. Diluted EPS reflects the potential dilution that could
     occur if securities or other contracts to issue common stock were exercised
     or converted into common stock. The effect of considering all potential
     dilutive securities (totaling -0- and 2,337,000 at December 31, 2003 and
     2002, respectively) are insignificant. Accordingly, basic and diluted EPS
     are the same for each year.

     Stock-Based Compensation - The Company records expense for stock options
     granted to employees by using APB 25, which requires expense to be
     recognized only to the extent the exercise price of the stock-based
     compensation is below the market price on the date of grant. Transactions
     in equity instruments with non-employees for goods or services are
     accounted for on the fair value method. Because the Company has elected not
     to adopt the fair value accounting described in SFAS No. 123 for employees,
     it is subject only to the disclosure requirements described in SFAS No.
     123.

                                      F-8
<PAGE>

                      EARTH SCIENCES, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


     Had compensation cost been determined based on an estimate of the fair
     value consistent with the method of SFAS No. 123 at the grant dates for
     awards under those plans, the Company's net income and EPS would have been
     reduced to the pro forma amounts indicated below.

                                                        Years Ended December 31,
                                                        ------------------------
                                                            2003        2002
                                                         ----------   ---------

Net (loss) income applicable to other stockholders:
    As reported                                          $ (189,000)  $ 243,000
    Fair value of stock based compensation (related to
       discontinued operations)                                --       (31,000)
                                                         ----------   ---------

    Pro forma                                            $ (189,000)  $ 212,000
                                                         ==========   =========

 Net (loss) income per share applicable to other
       shareholders - basic and diluted:
    As reported                                          $     (.01)  $     .01
                                                         ==========   =========

    Pro forma - basic and diluted                        $     (.01)  $     .01
                                                         ==========   =========


     There were no options granted in 2003 and options granted in 2002 had an
     exercise price equal to the market price on the date of the grant. The
     average fair value of employee options granted in 2002 was estimated on the
     date of grant using the Black-Scholes option-pricing model with the
     following weighted average assumptions:

                                            Years Ended December 31,
                                            -----------------------
                                                2003       2002
                                             ---------  ---------

               Expected volatility              N/A         87%
               Risk-free interest rate          N/A        3.5%
               Expected dividends               N/A          0


     Use of Estimates - The preparation of the Company's consolidated financial
     statements in conformity with generally accepted accounting principles
     requires the Company's management to make estimates and assumptions that
     affect the amounts reported in these financial statements and accompanying
     notes. Actual results could differ from those estimates. The Company makes
     significant assumptions concerning the impairment of and the remaining
     realizability of its Calgary facility, mineral properties and the deferred
     tax valuation allowance, as well as future decommissioning cost associated
     with its Calgary facility. It is at least reasonably possible that the
     Company's estimates could be materially revised within the next year.

                                      F-9
<PAGE>

                      EARTH SCIENCES, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


     Comprehensive Income/Loss - SFAS No. 130 establishes standards for
     reporting and display of comprehensive income/loss, its components and
     accumulated balances. Comprehensive income/loss is defined to include all
     changes in equity except those resulting from investments by owners and
     distributions to owners. Comprehensive income/loss was the same as net
     income(loss) in 2003 and 2002.

     Segment Information - The Company follows SFAS No. 131, Disclosure About
     Segments of an Enterprise and Related Information. SFAS No. 131 establishes
     standards on the way that public companies report financial information
     about operating segments in annual financial statements and requires
     reporting of selected information about operating segments in interim
     financial statements issued to the public. It also establishes standards
     for disclosures regarding products and services, geographic areas, and
     major customers. SFAS No. 131 defines operating segments as components of a
     company about which separate financial information is available that is
     evaluated regularly by the chief operating decision maker in deciding how
     to allocate resources and in assessing performance. At December 31, 2003,
     the Company has two business segments, natural resource exploration and the
     idled production of purified phosphate products.

     Reclassifications - Certain amounts in the prior year financial statements
     have been reclassified for comparative purposes to conform with the
     presentation in the current year financial statements. Such
     reclassifications had no effect on net income (loss).

2.   CONTINUED OPERATIONS:
     ---------------------

     During 2003, the Company spun-off ADA-ES (see Note 3) and as a result, is
     suffering a loss from its ongoing operations. In addition, it is involved
     in significant litigation (see Note 9) and does not have, nor is expected
     to have in the near future, a positive cash flow.

     Management's plans include continued efforts to (1) partner in activities
     at the Calgary facility and on its mineral resources to initiate sources of
     ongoing income, (2) sell idle and unused equipment in Calgary, and/or (3)
     divest or sell interests in mineral resources.

                                      F-10
<PAGE>

                      EARTH SCIENCES, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


     The financial statements of the Company have been prepared on a going
     concern basis which assumes continuity of operations and the realization of
     assets and liquidation of liabilities in the normal course of business.
     Continuation of the Company as a going concern is dependent upon receipt of
     additional advances or loans, sale of assets, resolution of its litigation
     and ultimately achieving positive cash flow from operations. If the Company
     cannot ultimately achieve positive cash flows, there is a substantial doubt
     about its ability to continue as a going concern. The financial statements
     do not include any adjustments should the Company be unable to continue
     operations as a going concern.

3.   SPIN-OFF OF ADA-ES:
     -------------------

     In March 2003, the Company and ADA-ES entered into an agreement (the
     "Distribution Agreement") for the pro rata distribution of all the common
     stock of ADA-ES to the stockholders of the Company based on a record date
     of August 29, 2003 and thereby forming ADA-ES as a separate public company.
     The Distribution Agreement required certain allocations of cash and
     liabilities among the Company and ADA-ES prior to the distribution of the
     ADA-ES common stock.

     Based on the Distribution Agreement, the Company issued one share of ADA-ES
     for each ten shares currently owned by the stockholders of the Company.
     Approximately 3,334,000 shares of ADA-ES were issued to the shareholders of
     the Company in September 2003 to effect the spin-off.

     Pursuant to the Distribution Agreement, ADA-ES assumed a total of
     $1,280,000 of debts of the Company and transferred $100,000 in cash to the
     Company in September 2003. During 2003 and 2002 ADA-ES made advances to the
     Company of $354,000 and $356,000, respectively, which amount for 2003
     includes the $100,000 cash transfer noted above. The Company accounted for
     the distribution of the ADA-ES common stock by a charge to its Additional
     Paid-in Capital of $1,565,000 representing the remaining net assets of
     ADA-ES as recorded by the Company.

4.   MINERAL RIGHTS:
     ---------------

     The Company's mineral properties include patented mining claims. These land
     and mineral properties are not in production. The recovery of the Company's
     investment in these assets is dependent upon future sales of the Company's
     interests therein or production from such assets. In addition, the Company
     leases various other mineral rights. Such leases are cancelable at the
     option of the Company.

                                      F-11
<PAGE>

                      EARTH SCIENCES, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


5.   OTHER ASSETS:
     -------------

     The net assets included in other assets of the Calgary facility as of
     December 31, 2003 can be summarized as follows:

     Property, plant and equipment, net of impairments and
       depreciation                                             $ 5,245,000
     Contingent net profits royalty (Note 9)                     (4,850,000)
                                                                -----------
                                                                $   395,000
                                                                ===========


     Machinery and equipment is fully depreciated and so no depreciation or
     amortization expenses have been recorded for either 2002 or 2003.

     The Company intends to sell certain equipment and other assets currently
     not in use at the facility, but continues to investigate alternative uses
     for the building and related land under lease.

6.   NOTES PAYABLE:
     --------------

     Notes payable and vendors are related to past raw material purchases at
     ESEC. Interest is at 10% and 11%. Remaining balances are past due and
     unsecured. The Company settled one of these notes in the amount of $15,000
     in March 2004 for $3,000.

7.   INCOME TAXES:
     -------------

     Deferred tax assets (liabilities) related to U.S. operations are as follows
     and are comprised of the following at December 31, 2003:


                                                                  U.S.
                                                              Operations
                                                              -----------
      Deferred tax assets - non-current:
              Tax effect of net operating loss carryforward   $ 2,141,000
              Property basis differences                          173,000
                                                              -----------
      Deferred tax assets                                       2,314,000
      Less valuation allowance                                 (2,314,000)
                                                              -----------

      Net deferred tax assets                                 $      --
                                                              ===========


     The Company has remaining U.S. a net operating loss carryforwards at
     December 31, 2003 of approximately $5,770,000, which if not utilized to
     reduce taxable income in future periods, will expire in the years 2010
     through 2023.

                                      F-12
<PAGE>

                      EARTH SCIENCES, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


     The Company also has approximately $6,400,000 in Canadian tax assets, for
     which a full valuation allowance has been provided due to the status of the
     Calgary facility as held for sale. The Canadian tax assets include the tax
     effect of a net operating loss carryforward related to the Canadian
     subsidiary and operations, which totaled $4,125,000 (U.S.).

     The utilization of these U.S. net operating loss carryforwards may be
     subject to restrictions because of the ownership changes of the Company
     that occurred as a result of issuances of the Company's securities. These
     restrictions may limit the amount of utilizable net operating loss
     carryforwards per year.

     The change in the valuation allowance in 2003 and 2002 was $(185,000) and
     $(158,000), respectively. The Company's net income tax expense (benefit)
     differs from the expected income tax rate of approximately 34% primarily
     due to the change in the valuation allowance.

8.   STOCKHOLDERS' EQUITY:
     ---------------------

     Stock Bonus Plan - The Company has reserved 125,000 shares for awards under
     a stock bonus plan established in 1978. As of December 31, 2003, 15,000
     shares remain available for award under the plan.

     Option Exercises - In 2002 the Company issued 141,000 shares to an officer
     and employee upon the exercise of options for total consideration of
     $35,000.

     Shares Issued for Services - The Company issued 81,000 and 478,000 shares
     of common stock in 2003 and 2002, respectively, for the payments of
     approximately $20,000 and $144,000 of employment related expenses, based
     upon the per share value of unrestricted common stock at the time of
     exchange.




                                      F-13
<PAGE>

                      EARTH SCIENCES, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


     Stock Options - The following is a table of options issued during 2003 and
     2002:
     <TABLE>
     <CAPTION>

                                                                                  Weighted
                                                                                  Average
                                                      Employees    Non-employee   Exercise
                                                       Options       Options       Price
                                                      ----------    ----------    -------
     <S>                                              <C>           <C>           <C>
     OPTIONS OUTSTANDING, January 1, 2002              1,608,000       100,000       0.31
             Options granted                             149,000          --         0.25
             Options exercised                          (141,000)         --         (.54)
             Options expired                            (279,000)     (100,000)     (1.78)
                                                      ----------    ----------    -------

     OPTIONS OUTSTANDING, December 31, 2002            1,337,000          --         0.25
             Options granted                                --            --         --
             Options exercised                              --            --         --
             Options transferred on ADA-ES Spin-Off   (1,337,000)         --         (.25)
                                                      ----------    ----------    -------

     OPTIONS OUTSTANDING, December 31, 2003                 --            --         --
                                                      ==========    ==========    =======
     </TABLE>

9.   COMMITMENTS AND CONTINGENCIES:
     ------------------------------

     Calgary Lease Issues - The Calgary facility is located on a site leased
     from the adjacent landowner who originally supplied feedstock to the
     facility in the 1980's. The lease has an indefinite term, but upon ESEC's
     permanent termination of operations, ESEC has a period of 24 months to
     remove all equipment, improvement and structures erected on the site after
     which time such assets become the sole property of the landlord. ESEC
     believes that the determination of when operations are permanently
     terminated is at its sole discretion. ESEC also has the obligation to
     return the site and any surrendered assets to the landlord in a safe
     condition that complies with the requirements of all statues, regulations
     and ordinances. Although ESEC has no current intent to terminate the lease
     and believes the site is currently in compliance with all regulations, ESEC
     has accrued and recorded as a liability of approximately $696,000 as an
     estimate of the remaining ultimate costs it would expect to incur to return
     the facility to the landlord under the terms of the lease. The amount
     recorded is an estimate that includes significant assumptions, and it is
     reasonably possible that these assumptions could change in the future and
     that such a change could be material. The landlord commissioned a Phase 1
     environmental study of the leased premises. Although this Phase 1 study did
     not include any cost estimates, the landlord has estimated the costs
     substantially higher than ESEC's estimated costs. The difference in
     estimates primarily relates to ESEC basing its estimate on revised
     quantities of the waste on site, assumptions regarding the future use of
     the building (including the future cost to demolish the building), and
     supervision costs. Any significant change to ESEC's estimates could result
     in further expenses being recorded at that time.

                                      F-14
<PAGE>

                      EARTH SCIENCES, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


     During 2001 the landlord asserted that the cessation of operations at the
     Calgary facility has resulted in the termination of the easement under
     which a rail line services the site and threatened to take steps to
     prohibit the use of and ultimately remove the improvements on the easement
     right-of-way. In January 2002, ESIR filed a motion for injunctive relief to
     restrain the landlord from interfering with use of the rail line. The
     landlord has agreed to an adjournment of the matter to a future date and
     has agreed not to interfere with the use of the rail line until the date of
     the hearing of the Company's application. In September 2002, the landlord
     filed their Statement of Defense and a Counterclaim asserting termination
     of the easement, the site lease and another underlying agreement,
     requesting an order from the Court to that affect and seeking damages in
     the amount of $6 million Canadian to remediate, restore and reclaim the
     leased site and easement. In December 2002 the Company filed a Statement of
     Defence to the Counterclaim vigorously denying breach of any obligation
     under the lease or easement, the landlord's characterization of the
     cessation of operations, the termination of the easement and site lease and
     that any amounts are due for reclamation of the site. To the best of
     management's knowledge and belief, the Company is in compliance with all
     permits and licenses issued for the construction and operation of the
     facility. The Company will continue to defend its rights for this rail line
     access to the site and the validity of the site lease. If the landlord is
     successful in asserting the termination of the rail line easement and site
     lease, it would severely affect the future economic feasibility of any
     operations at the Calgary facility. While there is secure truck access to
     the Calgary facility, the loss of the rail line easement could decrease the
     possibility of some alternative future uses of the Calgary facility. The
     financial implications of an adverse court ruling or a negotiated
     settlement are unknown, and therefore, the financial statements do not
     include any adjustment related to this matter.

     Contingent Net Profits Royalty on the Calgary Facility - In 1997, ESI
     finalized agreements with Yankee Atomic Electric Company and Vermont Yankee
     Nuclear Power Corporation (the "Yankee Companies") and acquired an option
     to liquidate the liability to them, which at that time totaled $9,382,000.
     The liability arose from prepayments by the Yankee Companies for uranium
     during the period that the Calgary facility operated as a uranium
     extraction facility. Under the agreement, ESI paid the Yankee Companies
     $1,250,000 and granted them a 10-year, 10% net profit royalty on activities
     at the Calgary facility. Future payments to the Yankee Companies under the
     royalty cannot exceed $4,850,000. ESI has the option to purchase the
     royalty interest at December 31, 2003 for $3,250,000. The Company's option
     expires in 2007, and if not exercised, the only payments will be the 10%
     net profit royalty from operations of the Calgary facility, if any. The
     Company had recorded this contingent future payment at the maximum amount.
     In 2001 in connection with the proposed sale of certain equipment and other
     assets at the Calgary facility, the Company netted this contingent future
     payment with the related asset (see Note 5), as the Company believes the
     likelihood that any future contingent payments is remote, as a result of
     the changes in potential future operations at the facility. No net profits
     payments have been made through December 31, 2003.

     Profit Sharing Retirement Plan - The Company's defined contribution and
     401(k) plan was assumed by ADA-ES in January 2003.

                                      F-15
<PAGE>

                      EARTH SCIENCES, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


10.  FAIR VALUE OF FINANCIAL INSTRUMENTS:
     ------------------------------------

     The estimated fair values for financial instruments under SFAS No. 107,
     Disclosures about Fair Value of Financial Instruments, are determined at
     discrete points in time based on relevant market information. These
     estimates involve uncertainties and cannot be determined with precision.

     As discussed in Note 9, the Company can terminate the contingent net
     profits royalty at December 31, 2003 for $3,250,000. Management estimates
     the ultimate payment of the liability (based on the current status of the
     Calgary facility) is remote at December 31, 2003. The amount the
     counterparty would be willing to settle this obligation for at December 31,
     2003 is unknown but management's estimate of the fair value of this
     liability is negligible.

     The Company believes its notes payables, vendors, and other liabilities are
     stated at amounts that may never be asserted or possibly negotiated for a
     lesser payment.

     The Company believes the fair value of all remaining financial instruments
     approximates the carrying amount due to their short-term nature.

11.  CONCENTRATIONS OF CREDIT RISK, MAJOR CUSTOMERS, AND OTHER RISKS AND
     UNCERTAINTIES:
     -------------------------------------------------------------------

     Credit risk represents the accounting loss that would be recognized at the
     reporting date if counterparties failed completely to perform as
     contracted. Concentrations of credit risk (whether on or off balance sheet)
     that arise from financial instruments exist for groups of customers or
     counterparties when they have similar economic characteristics that would
     cause their ability to meet contractual obligations to be similarly
     effected by changes in economic or other conditions described below. In
     accordance with applicable accounting standards, the credit risk amounts
     shown do not take into account the value of any collateral or security.
     Financial instruments that subject the Company to credit risk consist
     principally of cash and cash equivalents and receivables.

     Rental income from an unaffiliated customer which represents 77% of the
     Company's revenues the years ended December 31, 2003 and 2002.

12.  BUSINESS SEGMENT INFORMATION:
     -----------------------------

     The Company has identified its principal business segments as natural
     resource exploration and production of purified phosphate products. The
     accounting policies of the segments are the same as those described in the
     summary of significant accounting policies. These segments are shown in the
     accompanying table as ESI and ESEC, respectively. ESEC is located in
     Canada, and all its net assets, amounting to $416,000 are located in
     Canada.

     ESI's reportable segments are strategic business units that offer different
     products and services. They are managed separately because each business
     requires different technology and marketing strategies.

                                      F-16
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<CAPTION>

                        EARTH SCIENCES, INC. AND SUBSIDIARIES

                     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


2003                                  ESI          ESEC     Eliminating  Consolidated
                                                              Entries
                                   ---------    ---------    ---------    ---------
<S>                                <C>          <C>          <C>          <C>
Revenues from external customers   $    --      $  68,000    $    --      $  68,000
                                   ---------    ---------    ---------    ---------
        Total revenue              $    --      $  68,000    $    --      $  68,000
                                   =========    =========    =========    =========

Interest expense                   $  80,000    $  27,000    $    --      $ 107,000
Depreciation and amortization      $    --      $    --      $    --      $    --
Segment operating (loss)           $ (48,000)   $ (98,000)   $    --      $(146,000)
Segment (loss)                     $ (14,000)   $(254,000)   $  79,000    $(189,000)

Segment assets                     $ 441,000    $ 416,000    $    --      $ 857,000
Expenditures for segment assets    $    --      $    --      $    --      $    --



2002                                  ESI          ESEC     Eliminating  Consolidated
                                                              Entries
                                   ---------    ---------    ---------    ---------

Revenues from external customers   $    --      $  74,000    $    --      $  74,000
                                   ---------    ---------    ---------    ---------
        Total revenue              $    --      $  74,000    $    --      $  74,000
                                   =========    =========    =========    =========

Interest expense                   $ 115,000    $  23,000    $    --      $ 138,000
Depreciation and amortization      $   1,000    $    --      $    --      $   1,000
Segment operating income (loss)    $ (20,000)   $ (89,000)   $  19,000    $ (90,000)
Segment income (loss)              $ 694,000    $(111,000)   $(340,000)   $ 243,000

Segment assets                     $ 389,000    $ 416,000    $    --      $ 805,000
Expenditures for segment assets    $   4,000    $    --      $    --      $   4,000





                                        F-17




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